Between 1999 and 2008, the returns on Microfund averaged 4% a year. In his 2008 discussion of performance, the fund
Between 1999 and 2008, the returns on Microfund averaged 4% a year. In his 2008 discussion of performance, the fund president noted that this was nearly 6% a year better than the return on the U.S. market, a result that he attributed to the fund's strategy of buying only stocks with outstanding management.
The following table shows the returns on the market, the size and book-to-market factors, and the interest rate during this period:
The fund had marketed itself as a way to invest in small and medium-sized stocks, and this was reflected in a beta relative to the size factor of 1.1. It had also traditionally adopted a conservative approach to risk with an estimated market beta of .7. The fund's beta relative to the book-to-market factor was -.2. Evaluate the performance of the fund during this period.Stocks
Stocks or shares are generally equity instruments that provide the largest source of raising funds in any public or private listed company's. The instruments are issued on a stock exchange from where a large number of general public who are willing...
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